Mortgage loans are a routine way to pay for a home over time. While 15-year mortgages may not be as popular as 30-year loans, they typically come with lower interest rates, which result in much lower total interest costs over time. Here’s a look at the best 15-year mortgage rates.
15-year mortgage rates compared
*Rates as of late February 2024. Rates can change at any time without notice. Check with the lender for the latest rates.
**Monthly payment based on $330,000 home loan, not including property taxes, insurance or private mortgage insurance (PMI)
Our recommendations
Best for the self-employed: New American Funding
New American Funding is a nationwide lender with more than 20 years of history in the industry. Offering competitive rates and a flexible approval process, it’s a good option for self-employed applicants and others shopping around for a deal. A unique program offered by New American Funding is the NAF Cash loan. With NAF Cash, the lender buys the house with cash and sells it back to the borrower with a mortgage loan, potentially speeding up the purchase process and helping borrowers get a leg up in competitive markets.
Best for in-person applications: Chase
Chase is one of the largest banks in the world and operates more than 5,000 branches nationwide, so odds are there’s a convenient location nearby. You can apply in a branch or online, so even if you’re not near a branch, you can likely work with Chase if you meet borrower requirements. You can estimate your rate and payment using an online tool. If you’re already a Chase customer, your information may be pre-filled for a quicker application process.
Best for rate matches:Tomo
Tomo is an online lender with a unique mortgage-interest-rate matching program. If you’re approved for a lower rate elsewhere, Tomo will meet it. Tomo does not charge origination fees or other lender fees, so odds are it will save you money compared to other lenders. It also offers a program in which using a real estate agent found through Tomo saves you $750 off closing costs. That’s a compelling offer for anyone shopping for a new home.
Best for diverse offerings: Wells Fargo
Wells Fargo is another of the largest banks in the country. It has more than 4,000 branches. Wells Fargo is a major player in the mortgage lending market and provides a diverse range of home loan products suitable for various buyer needs. However, its past controversies over corporate practices have left some consumers wary, impacting its reputation in the industry.
Best for online applications: U.S. Bank
U.S. Bank is the fifth largest bank in the United States. The bank makes it easy for borrowers to apply for a loan online and offers competitive rates. Once approved, payments can be made via the bank’s app. With more than 2,000 branches, there is a good chance you can get in-person customer service for your loan in a convenient branch location, too.
Compare more 15-year mortgage rates
Methodology
To find the best 15-year mortgage rates, we reviewed dozens of lenders, including national banks, credit unions, and online lenders. To create our list, we focused exclusively on interest rates, measured with annual percentage rate (APR). Rates were current as of the writing date. Interest rates can change at any time without notice.
Today's national 15-year mortgage rate trends
After reaching a low of just over 2% in 2021, during the height of the COVID-19 pandemic, the Federal Reserve has steadily increased its target interest rate to combat inflation. Unfortunately, that translates to higher interest rates for mortgage loans. On February 29, 2024, interest rates averaged 6.26% for 15-year mortgages, according to the Federal Reserve Bank of St. Louis.
How to compare current 15-year mortgage rates
Your approved interest rate may vary across lenders due to several factors, including the lender’s financial guidelines and details in your application, such as your credit history and income. Savvy borrowers apply for several mortgage loans from lenders with the best rates. Comparing the offers you receive can help you choose the lowest-cost 15-year mortgage rate. The Federal Reserve maintains a history of current and past average mortgage interest rates in the FRED system.
Factors considered in 15-year mortgage rates
Market interest rates heavily influence 15-year mortgage rates. When the Federal Reserve changes its target interest rate, bank account and mortgage interest rates typically follow.
In addition to market factors, your borrower profile influences your approval odds and interest rate. A high credit score and low monthly debt obligations in relation to your income, measured using the debt-to-income ratio (DTI), are among the two most important factors lenders consider when approving mortgage loans.
Pros and cons of a 15-year mortgage
A 15-year fixed mortgage is not perfect for everyone. Here’s a look at the pros and cons:
Pros:
- Lower interest rates: A lower interest rate is one of the biggest perks of a 15-year mortgage, particularly when compared to a longer 30-year mortgage. Lenders generally offer lower interest rates when you borrow for a shorter period.
- Lower long-term interest costs: With a lower interest rate and shorter payback period, you’ll see lower total interest costs over the life of the loan.
- Pay off your loan faster: If you’re aiming for debt freedom, a shorter loan puts you on track for debt freedom in half the time of a longer 30-year loan.
Cons:
- Higher monthly payments: With a shorter payback period, monthly payments increase. That’sa big drawback if you can afford the payments. But for anyone on a tight budget, a higher payment could have you considering a longer 30-year loan instead.
- Lower mortgage tax deduction: When you pay a lower interest rate, your loan leads to lower interest costs. While that’s a net positive for your finances, it’ll also lead to less opportunity to save on taxes with the mortgage interest deduction. With the high standard deduction, many homeowners may not see any savings from the mortgage interest tax deduction.
Differences between a 15-year and 30-year fixed-rate mortgage
When comparing a 15-year and a 30-year fixed-rate mortgage, the most notable differences are the monthly payments and the total interest paid. With a 15-year mortgage, you'll have higher monthly payments, but you'll pay significantly less interest over the life of the loan due to the shorter term and often lower interest rates. In contrast, a 30-year mortgage offers lower monthly payments, making it more manageable for many budgets, but this comes at the cost of paying more interest over a longer period.
Should you get a 15-year mortgage?
Only you can decide if a 15-year mortgage suits your financial situation. Comparing interest rates, monthly payments, and total loan costs over time can help guide your decision. A longer-term mortgage could make more sense if you’re worried about monthly payments. If you can confidently cover the monthly cost, a shorter 15-year loan could be prudent. It’s also a smart move if it means you’ll reach your retirement years free of mortgage debt.
Refinancing into a 15-year mortgage
If you have more than 15 years left on your mortgage, you may want to refinance into a 15-year mortgage. If you can get a lower interest rate and pay off your home sooner, that’s a big win for your finances. And since your principal is already lower, the payments may not be that different. However, depending on the rates and monthly payments, it’s not always the right decision.
TIME Stamp: A 15-year mortgage can lower costs
A 15-year mortgage can be an excellent way to finance a home and keep interest costs under control. When you find the loan with the lowest interest rate and fees, you can confidently move forward, knowing you’re making a savvy financial decision.
Frequently asked questions (FAQs)
What is the lowest 15-year mortgage rate ever?
The lowest average 15-year mortgage interest rate was 2.10% in 2021, according to the Federal Reserve Bank of St. Louis.
Who has the lowest mortgage rates right now?
The lowest mortgage rate changes constantly. Shopping around can help you find the lowest rate for your credit profile.
What are 15-year mortgage rates?
The average 15-year mortgage rate changes frequently. It’s best to check current rates when shopping for a mortgage loan.
The information presented here is created by TIME Stamped and overseen by TIME editorial staff. To learn more, see our About Us page.
